The Terrorism and Illicit Finance Subcommittee held a hearing today to analyze strategies to combat financial backing of lone-wolf and small-scale terrorist attacks.

“Efforts to combat terrorist financing have traditionally focused on large scale funding sources; however, small-scale and lone-wolf style attacks have become more common and require significantly less funding,” said Subcommittee Chairman Steve Pearce (R-NM). “As foreign terrorist organizations suffer military defeats and become less capable of pulling off complex, large-scale attacks, many have embraced providing support – financial and otherwise – to individuals and small terror cells. These decentralized tactics allow acts of terrorism to be carried out with little coordination and limited financial assistance. As we move forward, it is important to examine how lone wolves and small cells are financing their operations when considering effective counter-terrorist financing efforts. I thank the witnesses who joined us today to shed light on new, innovative tactics to defend our nation from this ever-evolving threat.”

Key Takeaways from the Hearing

Efforts to combat terrorist financing have traditionally focused on large-scale funding sources; however, small-scale and lone-wolf style attacks have become increasingly more common through the years.

Congress must understand the patterns and techniques used to fund small-scale and lone-wolf attacks, and what additional controls financial institutions and law enforcement officials should consider to address small-scale terror financing.

Topline Quotes from Witnesses

“Once an individual or small group has become radicalized and is determined to carry out a terrorist attack, there are many ways they may fund their attack. In contrast to the highly sophisticated attacks of September 11th, which cost about $500,000 and took years of planning to execute, lone offender and small group attacks can be carried out very quickly, with minimal funding and preparation. The result is that in some cases authorities could be denied both the lag time within which they can run an effective investigation and the benefit of key tripwires – like the ability to follow travel, communications and financials trails – that in the past proved to be especially productive lines of investigative inquiry.” – Dr. Matthew Levitt, Director, Stein Program on Counterterrorism and Intelligence, Washington Institute for Near East Policy

“A review of financing of [Islamic State]-related activities reveals the modern-day financing of terrorism. A teenager in Virginia crafted an online manual on how to send money via Bitcoin to IS while a husband-wife team in Missouri raised money the old-fashioned way by fund raising cash from several members of the Bosnian diaspora. Another Virginia man bought gift cards and messaged their codes to an individual who he believed to be an IS fighter who was to use them to create encrypted online accounts. Beyond IS supporters in America, terrorists worldwide have used a variety of enterprises -- from ivory poaching to oil trading, antique theft to growing heroin.” – Seamus Hughes, Deputy Director, George Washington University’s Program on Extremism

“Unlike money laundering, where financial institutions look for indications that criminals are trying to make 'dirty' money look 'clean,' in small-scale terrorist threats, the typology is often the reverse. The terrorist in a lone-wolf attack frequently uses otherwise “clean” money for a criminal purpose.” – Frederick Reynolds, Global Head of Financial Crime, Barclays